Correlation Between Ping An and MetLife
Can any of the company-specific risk be diversified away by investing in both Ping An and MetLife at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ping An and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ping An Insurance and MetLife, you can compare the effects of market volatilities on Ping An and MetLife and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ping An with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and MetLife.
Diversification Opportunities for Ping An and MetLife
Excellent diversification
The 3 months correlation between Ping and MetLife is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Ping An is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ping An Insurance are associated (or correlated) with MetLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife has no effect on the direction of Ping An i.e., Ping An and MetLife go up and down completely randomly.
Pair Corralation between Ping An and MetLife
Assuming the 90 days horizon Ping An Insurance is expected to under-perform the MetLife. In addition to that, Ping An is 1.04 times more volatile than MetLife. It trades about -0.06 of its total potential returns per unit of risk. MetLife is currently generating about 0.11 per unit of volatility. If you would invest 7,965 in MetLife on November 2, 2024 and sell it today you would earn a total of 294.00 from holding MetLife or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ping An Insurance vs. MetLife
Performance |
| Timeline |
| Ping An Insurance |
| MetLife |
Ping An and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and MetLife
The main advantage of trading using opposite Ping An and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An position performs unexpectedly, MetLife can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in MetLife will offset losses from the drop in MetLife's long position.| Ping An vs. AIA Group Limited | Ping An vs. China Life Insurance | Ping An vs. MetLife | Ping An vs. Prudential plc |
| MetLife vs. Ping An Insurance | MetLife vs. AIA Group Limited | MetLife vs. China Life Insurance | MetLife vs. Prudential plc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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